The majority of energy supply contracts in the market are Fixed Contracts. This means all costs are fixed for a set amount of time.
Thankfully, the industry is changing and Flexible Contracts are becoming more available for all sizes of businesses across the board.
A Flexible Contract is created by splitting the anticipated consumption pattern of the customer into blocks. Each set block is priced using wholesale costs during the contract, rather than before the contract begins, which is the case with Fixed Contracts. This price setting is known as ‘trading’ in the industry.
- Unlike a Fixed Supply Contract where costs are set for the contract duration, if wholesale prices drop you can pick and choose when to buy your energy and for which periods.
- There is no supplier margin added, you pay the cost of the energy only.
- Being able to buy and sell within the same period allows you to reduce the initial cost of a trade.
Is it the right contract for my business?
Before switching to a Flexible Contract it is important to analyse whether it is the correct move for your company.
We can help you do this, and here’s just a few of the ways how:
- we analyse your current energy consumption to calculate your baseload and residual levels, advise when and where you are using the majority of your energy and establish if there are more cost-effective options for you,
- our Head of Energy Trading and Risk Management (ETRM) deals exclusively with Flexible Supply Contracts and monitors the wholesale markets daily, giving you the most up to date advice available,
- the ETRM team and its pricing analysts also provide expert advice on all Flexible products and pricing mechanisms available, to ensure you the best strategy for you,
- our wholesale market reports let you understand the driving forces behind prices,
- we contact suppliers on your behalf, handle negotiation and challenge prices with traders to ensure you pay a fair price.
Companies need to meet a minimum size requirement to qualify for a Flexible Contracts, but if you fall below this, you can still benefit by taking part in Basket Purchasing.
Give one of our friendly Flexperts a call on 0330 058 3405 to talk through all the detail about Flexible Contracts and what steps you can take to start saving money on your energy spend.